Daiwa said channel checks show sporting-goods retail sales value (RSV) slowed
QoQ in Q2 and monthly volatility rose, reducing Xtep’s (1368.HK) near-term
predictability. The bank flagged that a core-brand transformation will disrupt
wholesale channels and require upfront investment, likely diluting near-term
revenue and margins; Saucony can sustain high growth but Xtep’s core brand faces
slowing growth and intensifying competition. Daiwa trims EPS forecasts by about
12%, lowers its PT to HKD3.9 from HKD5.2 and downgrades the stock to Hold from
Outperform.
